Rewind more than a decade and network marketing was all the rage with companies like Avon doing brisk business thanks to door-to-door and word-of-mouth sales.
That tactic was quickly replaced by banner ads and blast e-mails during the height of the dotcom bust.
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“It’s a more efficient way of delivering products,” said Thalia Stamatelos, who runs an Arbonne cosmetics company from her home in Syosset, NY. “It lends itself to exclusivity because it’s not a mass-market product.”
Arbonne, the Swiss skin care, health and wellness company, doesn’t sell its products in stores and doesn’t spend money on advertising or product placement. It sells products through a network of independent consultants. Consumers can only buy products initially through one of those consultants and after the first purchase via the Web. According to Stamatelos, since Arbonne isn’t spending money on marketing, the company is able to develop products faster than larger companies.
With old-fashion network marketing, a small business would employ a team of consultants to sell its products. The consultants would typically get paid a commission and would hawk the goods at parties, to neighbors and anyone else referred to them. But thanks to the popularity of online social networks, network marketing just got a whole lot easier.
For small businesses that want to engage in this way of marketing, embracing technology is a key ingredient for success.
“If Facebook were a country it would be the fourth largest,” said Stamatelos. “Social networking and network marketing are analogues.”
Facebook touts it has more than 400 million active users with people spending more than 500 billion minutes per month on the Web site. And it’s not just college students posting status updates and pictures.
In fact, women over 55 are the site’s fastest growing demographic. And given its reach, it’s not surprising Facebook is becoming a haven for network marketing.
With social networks, small businesses can network with prospective clients fast and easy, said Michael Stelzner, executive editor of Social Media Examiner. “Small businesses are achieving amazing success after only a few months with social media,” he said.
Small businesses looking to take advantage of Facebook to sell products should make a tactful approach.
While users are willing to share personal information, they don’t like to be bombarded with self-serving ads disguised as content.
“You have to a walk a fine line between building relationships and not being ‘in your face selling’,” said Stamatelos. “I try to take the approach of being more informative, offering more information.”
For example: Stamatelos will post articles about chemicals in the environment or the dangers of sunbathing. She noted that while she isn’t doing the hard sell, she is also keeping her private life off the page as well.
For Stamatelos, the approach so far has been working. While it’s not a strong sales avenue yet, Stamatelos is selling products based on her Facebook page.
Stelzner suggests small businesses create a fan page on Facebook, which is a miniature Web site within the online giant. People become fans of the page instead of going to the company’s personal Facebook page. The fan page is where small business can publish tips and periodically offer special discounts.
But Facebook isn’t the only way to use the Internet to grow a network marketing business.
Since your business is only as good as the people selling the products, finding good consultants can be challenging. For Stamatelos, that’s where Craigslist came in.
To build a team of consultants Stamatelos aimed her search at the salon and spa industry. Sure she could have posted “a help wanted ad” on Monster.com or Yahoo.com, but she said Craigslist is a better venue because its users are looking for less traditional jobs.
“I got a ridiculous number of responses. I met a ton of makeup artists, salon owners and hair stylists.” Using Craigslist enabled her to reach people in the industry that she wouldn’t have met otherwise.
Another way to use the Web for network marketing is to make posts on Twitter or run a blog. Same rules apply: it’s OK to Tweet about a sale or promotion, but don’t Tweet about the greatness of the producing you’re pushing.
When it come to blogging, keep the content informative and steer clear of the sales pitch. Incorporating video into a blog may also engage visitors.
“The goal is to offer information out there about a topic on health and wellness and offering information on ways to incorporate natural and organic products into your life,” said Stamatelos, noting that if it results in a sale all the more better.